Survey of inflation and growth expectations – 3rd quarter 2023

Summary:

An online survey conducted among Italian businesses with at least 50 employees in the industry and services sector from August 23 to September 13, 2023, revealed a deterioration in the economic outlook and business conditions. The respondents' expectations regarding the country's economic situation, as well as their own operational conditions over the next three months, have significantly worsened compared to the previous quarter. While the difficulties related to energy resource costs have subsided, the overall demand dynamics have deteriorated, with a decline in foreign demand for the first time since the end of 2020. The prospects for sales have also weakened, but remain favorable overall. Investment conditions have deteriorated, with companies expecting a decline in growth rate in 2023. Employment prospects have become less favorable, and price-setting by businesses has slowed down and is expected to continue to decelerate over the next 12 months. Finally, expectations regarding consumer inflation have further decreased across all time horizons, with forecasts ranging from 4.2% to 4.7% over the next 12 months, down from a peak of 8.1% in the fourth quarter of 2022.